Oil falls below $51 amid weak consumer spending

I / Singapur May 1, 2009, 14:12 IST

Oil prices fell below $51 a barrel today in Asia as investors clung to a month-long trading range amid uncertainty about when the global economy may emerge from a severe recession.       

Benchmark crude for June delivery was down 58 cents to $50.54 a barrel by afternoon in Singapore, in electronic trading on the New York Mercantile Exchange. The contract yesterday gained 15 cents to settle at $51.12.       

Trading volume was light in Asia as markets in mainland China, Hong Kong, India, Malaysia, South Korea, Thailand and Singapore were closed for holidays.       

Oil has traded near USD 50 a barrel for the past month as investor optimism about an eventual economic recovery offsets bleak news suggesting US consumer demand remains weak.       

A Commerce Department report yesterday said consumer spending fell more than expected, dropping 0.2% in March. And incomes were also down by 0.3% as waves of layoffs made their way through the economy.       

Meanwhile, the Labor Department said a record 6.3 million people drew unemployment benefits last week. However, the number of newly laid-off workers signing up for jobless benefits dropped unexpectedly to a seasonally adjusted 631,000.